WT/DS600/6  
 
16 April 2021  
(21-3292) Page: 1/10 
  Original: English  
 
 
EUROPEAN UNION AND CERTAIN MEMBER STATES - CERTAIN MEASURES  
CONCERNING  PALM OIL AND OIL PALM CROP -BASED BIOFUELS  
REQUEST FOR THE ESTABLISHMENT OF A PANEL  BY MALAYSIA  
The following communication, dated 15 April 2021 , from the delegation of Malaysia  to the 
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.  
_______________  
My authorities have instructed me to request the establishment of a panel pursuant to Articles 4.7 
and 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ( 'DSU'), 
Article XXIII of the General Agreement on Tariffs and Trade 1994 ( 'GATT 1994 '), Article 14.1 of the 
Agreement on Technical Barriers to Trade ( 'TBT Agreement ') and Article 30 of the Agreement on 
Subsidies and Countervailing Measures ( 'SCM Agreement ') regarding certain measures imposed by 
the European Union ( 'EU') and certain EU Member States affecting palm oil and oil palm crop -based 
biofuel from Malaysia.  
On 15 Janu ary 2021, Malaysia requested consultations with the EU, as well as France and Lithuania, 
pursuant to Article 4 of the DSU, Article XXII of the GATT 1994, Article 14.1 of the TBT Agreement 
and Article 30 of the SCM Agreement. This request was circulated on 19 January 2021 as document 
WT/DS600/1. The consultations were held on 17 March 2021 with a view to reaching a mutually 
agreed solution. Regretfully, the consultations failed to settle the dispute.  
As a result, Malaysia respectfully requests that a panel b e established pursuant to the dispute 
settlement provisions referred to above to examine the measures at issue, identified in this request, 
on the basis of the standard terms of reference as set out in Article 7.1 of the DSU.  
I. BACKGROUND  
1. Malaysia is the world 's second largest producer of palm oil. In 2020, Malaysia produced 
around 19.14 million metric tonnes of crude palm oil, accounting for 26% of world palm oil 
production (73.79 million tonnes1) and 34% of world palm oil exports.2 In 2020, Malaysia 
exported around 1.94 million metric tonnes of palm oil to the EU.3 Malaysia 's palm oil 
industry indirectly employs more than 3 million people and about 28% of all oil palm -planted 
area in Malaysia is owned or farmed by smallholder farme rs, who have benefited enormously 
from oil palm cultivation.4 Palm oil production and export have been major factors in 
Malaysia 's ability to reduce poverty from 50% in the 1970s, down to less than 5% today.  
2. As one of the major producers and exporters of  palm oil and products derived from palm oil, 
Malaysia recognises that it has an important role to play in fulfilling the growing global need 
for oils and fats in a sustainable manner. Malaysia is a responsible producer of palm oil and 
has long taken a glo bal leadership role  in instituting a  continuous stream of oil palm 
 
1 Oil World No.6, Vol. 64, page 77.  
2 Malaysian Palm Oil Board, Production 2019. Available at 
http://bepi.mpob.gov.my/index.php/en/production/production -2020/production -of-oil-palm-products -
2020.html . 
3 Malaysian Palm Oil Board, Export Of Palm Oil By Destination, 2020. Available at 
http://bepi.mpob.gov.my/index.php/en/export/export -2020/export -of-palm-oil-to-major -destinations -
2020.html . 
4 Malaysian Palm Oil Board, available at http://bepi.mpob.gov.my/index.php/en/area/area -2020/oil -
palm-planted -area-as-at-dec-2020.html . WT/DS600/6  
 
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  cultivation and palm oil process innovations aimed at  making palm oil production more 
sustainable and environmentally friendly. As of 31 December 2020, nearly 90% of Malaysia 's 
total oil palm cultivation had obtained the Malaysian Sustainable Palm Oil ( 'MSPO ') 
certification. As of that date, 428 of 452 oil palm mills, corresponding to around 95% of 
Malaysia 's palm oil mills, had received the MSPO certification. Noteworthy is the fact that,  
since 1 January 2020, Malaysia made the MSPO certification mandatory.  
3. It is important to recall Malaysia 's commitment at the 1992 Rio Earth Summit, where it 
pledged to maintain at least 50% of the country 's landmass under forest and tree cover. On 
the bas is of data from 2018, about 55.3% of Malaysia 's land areas are under forest cover, 
exceeding the country 's pledge made at the 1992 Rio Earth Summit.5 
II. THE CONTEXT OF THE DISPUTE  
4. In the context of addressing the environmental risks posed by the extensiv e use of fossil 
fuels, the EU and its Member States have, since 2009, adopted a policy of promoting the 
use of biofuels by setting national targets for the use of renewable energy in various sectors, 
including the transport sector. This policy led to a rap id increase in the EU consumption of 
biofuels, produced mainly from food and feed crops.  
5. While, in general, the measures taken by the EU and certain EU Member States under the 
renewable energy policy pursue the reduction of greenhouse gas ( 'GHG') emission s and the 
achievement of commitments under international climate agreements, Malaysia considers 
that some of these measures are inconsistent with the EU 's and certain EU Member States ' 
WTO obligations.  
6. In particular , the EU  contends that only palm oil pro duction entails a high risk of indirect 
land-use change ( 'ILUC'). On that basis, the share of oil palm crop -based biofuel shall not 
exceed the level of consumption of such fuel in each EU Member State in 2019 and shall 
gradually decrease to 0% by 2030.6 Malaysia submits that, in fact, a number of EU Member 
States appear to phase out oil palm crop -based biofuels, for purposes of meeting EU 
renewable energy targets, much earlier than 2030. Unless certified as low ILUC -risk, oil 
palm crop -based biofuel cann ot be counted towards EU renewable energy targets.7 
7. Generally speaking, the measures adopted by the EU, as well as the related measures so 
far adopted by certain EU Member States, confer unfair benefits to EU domestic producers 
of certain biofuel feedstoc ks, such as rapeseed, sunflower, and soybeans, and to the biofuels 
produced therefrom, at the expense of, respectively, palm oil and oil palm crop -based biofuel 
produced in Malaysia. These measures also discriminate against palm oil and oil palm crop -
based  biofuel from Malaysia in favour of 'like products ' from third countries.  
8. Malaysia submits that the measures adopted by the EU and certain EU Member States 
already limit and will increasingly reduce the volume of oil palm crop -based biofuel, and, 
hence, t he amount of palm oil used for its production, that may be counted towards reaching 
EU renewable energy targets and, consequently, that will be sold in the EU market.  
 
5 Malaysian Ministry of Energy and Natural Resources, available at https://www.ketsa.gov.my/en -
my/KetsaCore/Forestry/Pages/Total -Forested -Areas -in-Malaysia.aspx . 
6 From 31 December 2023 until 31 December 2030 at the latest, that limit shall gradually decrease to 0 
%. See Article 26(2) of the RED II.  
7 See European Commission, Factsheet, Indirect Land Use Change, 17 October 2012, available at 
https://ec.europa.eu/commission/presscorner/detail/de/MEMO_12_787 . See also Recitals 80 and 81 and 
Article 26.2 of the RED II.  WT/DS600/6  
 
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  III: THE MEASURES AT ISSUE  
A. EU measures  
EU renewable energy target  
9. Directive (EU) 201 8/2001 of the European Parliament and of the Council of 11 December 
2018 on the promotion of the use of energy from renewable sources8 ('RED II ') (2018) 
establishes a new binding EU target of a share of at least 32% of renewable energy in the 
EU gross final consumption of energy by 2030, aiming at '[e]nsur(ing) robust GHG emission 
savings and minimiz(ing) unintended environmental impacts '.9 EU Me mber States are 
required to transpose this general renewable energy policy framework by 30 June 2021.10 
10. The RED II also places a limit on biofuel consumption in the transport sector, which an EU 
Member State may take into account for its calculation of the  share of energy from 
renewable sources and, ultimately, when assessing whether it achieves its renewable energy 
target. The amount of biofuels that may be derived from food and feed crops is set at 7% 
(or lower11) of total energy consumption in the transp ort sector (hereinafter, referred to as 
the '7% limit '). For the transport sector, the RED II sets an overall objective of achieving 
14% of its energy consumption from renewable sources by 2030.12 
11. After 1 January 2021, EU Member States ' share of energy from renewable sources may not 
fall below certain specified thresholds.13 The thresholds are based on a calculation of the 
sum of: (i) the gross final consumption of electricity from renewable sources; (ii) the gross 
final consumption of e nergy from renewable sources in the heating and cooling sector; and 
(in relevant part) (iii) the final consumption of energy from renewable sources in the 
transport sector.14 
12. In calculating an EU Member State 's gross final consumption of energy from renewa ble 
sources, the share of biofuels, bioliquids, or biomass fuels associated with a high risk of ILUC 
(i.e., produced from food and feed crops for which 'a significant expansion of the production 
area into land with high -carbon stock is observed '), must be below the consumption level of 
such fuels in that EU Member State in 2019 (unless such fuels are certified to be 'low ILUC -
risk' fuels). The share of these 'high ILUC -risk' biofuels, bioliquids, or biomass fuels may not 
exceed the level of consumption of s uch fuels in a given EU Member State in 2019 
(hereinafter, referred to as the 'high ILUC -risk cap '), unless they are certified to be 'low 
ILUC-risk' biofuels, bioliquids or biomass fuels. The RED II provides that '[f]rom 31 
December 2023 and until 31 Decem ber 2030 at the latest, that limit is to gradually decrease 
to 0% ' (hereinafter, referred to as the 'high ILUC -risk phase out ').15 
ILUC-risk 
13. The Commission Delegated Regulation (EU) 2019/807 of 13 March 201916 ('Delegated 
Regulation ') supplements the RED I I by laying down the criteria for determining the high 
 
8 Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the 
promotion of the use of energy from renewable sources, OJ L 328, 21.12.2018, p. 82 –209, available at 
https://eur -lex.europa.eu/legal -content/EN/ALL/?uri=uriserv:OJ.L_.2018.328.01.0082.01.ENG . 
9 Article 3(1) of and recital 8 in the preamble to the RED II.  
10 Article 36(1) of the RED II.   
11 Article 26(1) of the RED II  allows EU Member States to set lower limits and, in so doing, to distinguish 
between biofuels, bioliquids and biomass fuels produced from food and feed crops and specifically from oil 
crops . 
12 Article 25(1) of the RED II.  
13 Article  3(4) of the RE D II. 
14 Article  7(1) of the RED II.  
15 Article 26(2)  of the RED II.  
16 Commission Delegated Regulation (EU) 2019/807 of 13 March 2019 supplementing Directive (EU) 
2018/2001 of the European Parliament and of the Council as regards the determination of high in direct land -
use change -risk feedstock for which a significant expansion of the production area into land with high carbon 
stock is observed and the certification of low indirect land -use change -risk biofuels, bioliquids and biomass 
fuels, OJ 2019 L 133, p.  1-7, available at https://eur -lex.europa.eu/legal -
content/EN/ALL/?uri=uriserv:OJ.L_.2019.133.01.0001.01.ENG . WT/DS600/6  
 
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  ILUC-risk feedstock for which a significant expansion of the production area into land with 
high carbon stock is observed, as well as for certifying low ILUC -risk17 biofuels, bioliquids 
and biomass fue ls. The alleged 'scientific basis ' for these criteria is provided in the Report 
from the Commission on the status of production expansion of relevant food and feed crops 
worldwide ( 'Status Report ').18  
14. Under Article 3 of the Delegated Regulation, for purposes of determining high ILUC -risk 
feedstock for which a significant expansion of the production area into land with high -carbon 
stock is observed, two cumulative criteria are applied: (1) the average annual expansion of 
the global prod uction area of the feedstock since 2008 must be higher than 1% and affect 
more than 100,000 hectares; and (2) the share of such expansion into land with high -carbon 
stock must be higher than 10%, in accordance with a particular mathematical formula, which 
consists of the share of expansion into land with high -carbon stock, the share of expansion 
into land referred to in Article 29(4)(b) and (c) of the RED II, and the share of expansion 
into land referred to in Article 29(4)(a) of the RED II. The Delegated R egulation, however, 
does not provide any explanation or guidance as to the scientific rationale of the factors and 
values taken into account for these criteria. The selected reference period, as well as the 
benchmark for annual expansion, appear to have be en skilfully set so that only palm oil 
would be negatively affected by the measure.  
15. The criteria for determining the high ILUC -risk feedstock and low ILUC -risk biofuels, 
bioliquids or biomass fuels are based on the alleged overall expansion with respect to  each 
particular feedstock, and not on a transparent methodology based on the circumstances in 
a particular country or the particular circumstances of production, including the management 
of land, in that country. The mechanism does not, inter alia , take i nto account features 
unique to tropical regions, which have a considerably larger forest cover than other WTO 
Members, such as the EU.  
16. Contrary to its intended purpose, the Status Report does not offer sound, accurate, and 
comprehensive scientific evidenc e to support the conclusions reached with respect to the 
respective commodities. As the Status Report itself admits, the available data has oftentimes 
either been selectively chosen or has been 'assumed ', because the actual data was often 
unavailable or no t found.19 
17. The certification as low ILUC -risk (hereinafter, referred to as the 'low ILUC -risk 
certification '), as provided by Article 4 of the Delegated Regulation, is possible for biofuels, 
bioliquids, and biomass fuels that are produced under circumstanc es that avoid ILUC effects, 
if all relevant criteria are met, namely that: (1) such products comply with the sustainability 
and GHG emissions saving criteria set out in Article 29 of the RED II; (2) such products have 
been produced from additional feedstoc k obtained through additionality measures that meet 
the specific criteria set out in Article 5 of the Delegated Regulation; and (3) the evidence 
needed to identify the additional feedstock and to substantiate claims regarding the 
production of additional f eedstock is duly collected and thoroughly documented by the 
relevant economic operators).20  
18. Although the RED II does not single out any particular fuels as carrying high -ILUC risk, it 
follows from the Delegated Regulation that only oil palm crop -based bio fuel must be certified 
 
17 Low ILUC -risk biofuels, bioliquids and  biomass are defined in Article 2(37) of RED II as ‘biofuels, 
bioliquids and biomass fuels, the feedstock of which was produced within schemes which avoid displacement 
effects of food and feed -crop based biofuels, bioliquids and biomass fuels through impro ved agricultural 
practices as well as through the cultivation of crops on areas which were previously not used for cultivation of 
crops, and which were produced in accordance with the sustainability criteria for biofuels, bioliquids and 
biomass fuels laid down in Article 29 ’. 
18 Report from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions on the status of production expansion of relevant food and 
feed crops worldwide, COM(2019 ) 142 final (13 March 2019).  
19 Report from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions on the status of production expansion of relevant food and 
feed crops worldwide, COM(2019) 142 final (13 March 2019), pp. 8, 13, 14.  
20 Articles 4 and 5 of the Delegated Regulation 2019/807, identify the cumulative criteria that must be 
met in order to certify biofuels, bioliquids and biomass fuels as low ILUC -risk. These criteria inclu de the 
sustainability and GHG emissions saving criteria and the need to comply with additionality requirements.  WT/DS600/6  
 
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  as low ILUC -risk to be taken into account in order to meet the EU renewable energy targets 
and to benefit from EU Member States ' support schemes. It appears that the conditions set 
out in Articles 4 and 5 of the Delegated Regulation are designed in a manner so as to 
effectively preclude oil palm crop -based biofuel from meeting these conditions.  
19. EU Member States will still theoretically allow the importation of high ILUC -risk feedstocks 
or biofuels, bioliquids, and biomass fuels produ ced therewith. Between 31 December 2023 
and 31 December 2030, however, the share of fuels produced from feedstocks considered 
by the EU as high ILUC -risk feedstocks is to gradually decrease to 0% for the calculation of 
an EU Member State 's gross final cons umption of energy from renewable sources referred 
to in Article 7 of the RED II and the minimum share referred to in the first sub -paragraph of 
Article 25(1) of the RED II.21 As a result, the demand for biofuels will inevitably turn to fuels 
that may be ta ken into account in order to meet the EU renewable energy targets and that 
benefit from EU Member States ' support measures.  
The sustainability and GHG emission savings criteria  
20. Energy from biofuels, bioliquids, and biomass fuels must also satisfy the sustainability and 
GHG emission savings criteria in order to be taken into account for the purpose of 
contributing towards the EU 's renewable energy targets and being eligible under the relevant 
support schemes put in place by EU Member States.22 
21. The GHG e mission savings criteria provide that the greenhouse gas emission savings from 
the use of biofuels, bioliquids and biomass fuels shall be either 50%, 60%, or 65% of total 
emissions from the use of the biofuel, depending on the age of the installation in wh ich that 
fuel is produced.23 
22. The European Commission may decide on the eligibility of the voluntary national or 
international schemes setting standards for the production of biofuels, bioliquids or biomass 
fuels, or other fuels. To this end, the European C ommission may adopt implementing 
legislation laying down rules regarding, inter alia , adequate standards of reliability, 
transparency and independent auditing that must be satisfied by all voluntary schemes.24 
However, the same opportunity is not provided as regards mandatory systems of 
sustainability standards, such as the government -imposed MSPO standard, which, arguably, 
should be recognised by the EU and reflected in the measures at issue.  
Relevant legal and other instruments  
23. Malaysia understands that the measures at issue are set up and implemented through the 
RED II, and in particular, but not exclusively, Article 26 thereof, and the Delegated 
Regulation, both referred to above, as well as, inter alia , the following legal and  other 
instruments, considered alone and in combination:  
i. Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 
on the promotion of the use of energy from renewable sources and amending and 
subsequently repealing Directives 200 1/77/EC and 2003/30/EC, OJ 2009 L 140, p. 16 
('RED I '), as amended by Directive (EU) 2015/1513 of the European Parliament and 
of the Council of 9 September 2015 amending Directive 98/70/EC relating to the 
quality of petrol and diesel fuels and amending Dir ective 2009/28/EC on the promotion 
of the use of energy from renewable sources, OJ 2015 L 239, p. 1;  
ii. Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 
December 2018 on the Governance of the Energy Union and Climate Action, amen ding 
Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and 
of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 
2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the 
 
21 Article 26(2) of the RED II.  
22 Article 29(1) of the RED II . 
23 Article 31 of the RED II and Annex V thereto lay down rules for calculating the GHG impact of 
biofuels, bioliquids and their fossil fuel comparators . 
24 Article 30(8) of the RED II.  WT/DS600/6  
 
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  Council, Council Direct ives 2009/119/EC and (EU) 2015/652 and repealing Regulation 
(EU) No 525/2013 of the European Parliament and of the Council, OJ 2018 L 328, p. 
1 ('Regulation 2018/1999 ');  
iii. European Parliament Resolution of 4 April 2017 on palm oil and deforestation of 
rainforests (2016/2222(INI)), OJ 2018 C 298, p. 2 ( 'Resolution of 4 April 2017 ');  
iv. Report from the Commission to the European Parliament, the Council, the European 
Economic and Social Committee and the Committee of the Regions on the status of 
production expans ion of relevant food and feed crops worldwide, COM(2019) 142 final 
(13 March 2019) ( 'Status Report '); and  
v. Any annexes thereto, amendments, supplements, replacements, renewals, 
extensions, implementing measures or any other related measures, and any 
exempti ons applied.  
B. EU Member States ' measures  
24. The RED II envisages that the renewable energy targets be reached by adopting at the EU 
Member States ' level various support schemes, including tax refunds, reductions, or 
exemptions.25 Two EU Member States, name ly France and Lithuania, have already adopted 
measures that transpose the RED II into national legislation.  
The exclusion of oil palm crop -based biofuel from the tax reduction, as well as the fuel tax reduction 
itself, under the French 'General Tax on Poll uting Activities ' 
25. In view of the provisions of the EU 's renewable energy framework, including the RED I and 
the RED II, France has introduced a General Tax on Polluting Activities, which includes a tax 
on the consumption of petrol and diesel (the 'French fuel tax regulation '). The French 
fuel tax  provides incentives for the consumption of petrol and diesel that contain certain oil 
crop-based biofuels in order to meet EU renewable energy targets. More specifically, the tax 
rate for petrol and diesel is redu ced depending on the volume of biofuels included 
(hereinafter, referred to as the 'French fuel tax reduction ').26 
26. The French Code des douanes  expressly states that palm oil -based products are not 
considered as biofuels.27 The practical implication of this provision is that petrol and diesel 
that contain oil palm crop -based biofuel cannot benefit from the lower tax rate for petrol 
and diesel that contain certain oil crop -based biofuels (hereinafter, referred to as the 
'exclusion from the French fuel tax reduction '). Oil palm crop -based biofuel is, 
therefore, at a competitive disadvantage vis -à-vis competing 'like products '. 
27. Malaysia understands that the French fuel tax is set up and implemented through the 
following legal in struments:  
i. Article 266 quindecies of the French Code des douanes, as modified by the Loi 
n°2018 -1317 du 28 décembre 2018, Loi n° 2019 -1479 du 28 décembre 2019, and 
the Loi n°2020 -1721 du 29 décembre 2020;  
ii. Articles L. 661 -1 to 661 -9 of the French Code de l 'énergie;  
 
25 Article 2(5) of the RED II.  
26 Article 266 quindecies of the French Code des douanes, as modified by Article 192 of Loi n° 2018 -
1317 du 28  décembre 2018 de finances pour 2019. See also Décret no 2019 -570 du 7 juin 2019 portant sur la 
taxe incitative relative à l'incorporation de biocarburants, JORF no 0133 of 9 June 2019, no. 13; Ministère de 
l’Action et des Comptes publics, Circulaire du 12  juin 2019 – Taxe incitative relative à l’incorporation de 
biocarburants (TIRIB), available at https://www.douane.gouv.fr/si tes/default/files/bod/src/dana/da/Energie -
environnement -loi%20de%20finances_19 -023.pdf  and Annexes, available at 
https://www.douane.gouv.fr/sites/default/files/bod/src/dana/da_annexes/Energie -environnement -
loi%20de%20finances_19 -023_1.pdf . 
27 Article 266 quindecies V B 2. (3°) of the French Code des douanes, as modified by Article 192 of Loi 
n° 2018 -1317 du 28 décembre  2018 de finances pour 2019.  WT/DS600/6  
 
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  iii. Décret n° 2019 -570 du 7 juin 2019 portant sur la taxe incitative relative à 
l'incorporation des biocarburants;  
iv. Arrêté du 23 novembre 2011 pris en application de l'ordonnance n° 2011 -1105 du 
14 septembre 2011 et du décret n° 2011 -1468 du 9 novembre 2011 et relatif à la 
durabilité des biocarburants et des bioliquides;  
v. Arrêté du 2 mai 2012 relatif aux contenus énérgétiques des biocarburants et des 
carburants;  
vi. Circulaire du 12 juin 2019 Tax incitative relative à l 'incorporation de biocarburants  
(TIRIB); and  
vii. Any annexes thereto, amendments, supplements, replacements, renewals, 
extensions, implementing measures or any other related measures, and any 
exemptions applied.  
28. In particular, but not exclusively, Malaysia is concerned with the French fuel tax reduction 
under Article 266 quindecies of the French Code des douanes and the exclusion from the 
French fuel tax reduction under Article 266 quindecies V B 2. 3° of the French Code des 
douanes.  
Lithuania 's Law No XI -1375 on renewable energy  
29. In view of the provisions of the RED II and the Delegated Regulation, Lithuania has amended 
its law on renewable energy to reflect the revised EU rules on ILUC.  
30. Lithuania, like any other EU Member State, will still theoretically allow the importation of 
high ILUC -risk feedstocks or biofuels, bioliquids, and biomass fuels produced therewith. By 
2030, however, the share of fuels produced from feedstocks considered by the EU as high 
ILUC-risk feedstocks are to gradually decrease to 0% for the calculation of Lithuania 's gross 
final consumption of energy from renewable sources referred to in Article 7 of the RED II 
and the minimum share referred to in the first subparagraph of Article 25(1) of the RED II.  
31. Malaysia understands that Lithuania 's measure is set up and implemen ted through the 
following legal instruments:  
i. Lithuania 's Law No XI -1375 on renewable energy, as amended by Law No XIII -2869 
amending Articles 1, 2, 3, 4, 5, 6, 11, 13, 14, 16, 17, 20, 20(1), 22, 25, 28, 29, 35, 
37, 38, 39, 46, 48, 49, 55, 58, 59, 60, 61, 62, 63, 63, 64 and the Annex of Law 
No XI-1375 on renewable energy, repealing Article 11(1) and adding Article 20(2) of 
28 April 2020;28 and 
ii. Any annexes thereto, amendments, supplements, replacements, renewals, 
extensions, implementing measures or any othe r related measures, and any 
exemptions applied.  
IV. LEGAL BASIS FOR THE COMPLAINT IN RESPECT OF THE EU MEASURES  
32. With regard to the EU measures at issue, as embodied and developed in the respective legal 
and other instruments as specified above in paragraph 23 and as applied by the relevant 
authorities, Malaysia considers that these measures are inconsistent with the EU 's 
obligations under the TBT Agreement and the GATT 1994. In particular, the measures at 
issue are inconsistent with:  
 
28 Lietuvos Respublikos atsinaujinančių išteklių energetikos įstatymo Nr. XI -1375 1, 2, 3, 4, 5, 6, 11, 13, 
14, 16, 17, 20, 20(1), 22, 25, 28, 29, 35, 37, 38, 39, 46, 48, 49, 55, 58, 59, 60, 61, 62, 63, 63(1), 64 
straipsnių ir priedo pakeitimo, 11(1) straipsn io pripažinimo netekusiu galios ir įstatymo papildymo 20(2) 
straipsniu įstatymas Nr. XIII-2869, available at https://e -
seimas.lrs.lt/portal/legalAct/lt/TAD/76ec ca608acd11eaa51db668f0092944 . WT/DS600/6  
 
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  TBT Agreement  
i. Article 2.1 of the TBT Agreement, because the measures at issue, notably the high 
ILUC-risk cap and the high ILUC -risk phase  out, are technical regulations within the 
meaning of Annex 1.1 of the TBT Agreement, which accord to Malaysia 's oil palm 
crop-based biofuel imported into the EU  treatment less favourable than that 
accorded to 'like products ' imported into the EU from othe r countries and to 'like' 
domestic products;  
ii. Article 2.2 of the TBT Agreement, because the measures at issue, notably the 7% 
limit, the high ILUC -risk cap and the high ILUC -risk phase out, are technical 
regulations within the meaning of Annex 1.1 of the TB T Agreement, which are more 
trade -restrictive than necessary to achieve the objectives pursued by the measures;  
iii. Article 2.4 of the TBT Agreement, because the measures at issue, notably the high 
ILUC-risk cap and the high ILUC -risk phase out, are technical regulations within the 
meaning of Annex 1.1 of the TBT Agreement, which are not based on the relevant 
international standards;  
iv. Article 2.5 of the TBT Agreement, because the EU, in preparing, adopting or applying 
the measures at issue, notably the 7% limit,  the high ILUC -risk cap and the high 
ILUC-risk phase out, which are technical regulations within the meaning of Annex 
1.1 of the TBT Agreement, has failed, upon the request of Malaysia, to explain the 
justification for those measures in terms of Articles 2 .2 to 2.4 of the TBT Agreement;  
v. Article 2.8 of the TBT Agreement, because the measures at issue, notably the high 
ILUC-risk cap and the high ILUC -risk phase out, are technical regulations within the 
meaning of Annex 1.1 of the TBT Agreement, which are base d on an abstract and 
unsubstantiated high -ILUC risk concept instead of the performance of such biofuels;  
vi. Article 2.9 of the TBT Agreement, because the measures at issue, notably the 7% 
limit, the high ILUC -risk cap and the high ILUC -risk phase out, are tec hnical 
regulations within the meaning of Annex 1.1 of the TBT Agreement, which were 
adopted without the required timely publication and notification of these measures 
and organising an adequate process for commenting;  
vii. Article 5.1.1 of the TBT Agreement, be cause the EU, by preparing, adopting or 
applying the measure at issue, namely the low ILUC -risk certification, is a conformity 
assessment procedure within the meaning of Annex 1.3 of the TBT Agreement, under 
which suppliers of oil palm crop -based biofuel f rom Malaysia are treated less 
favourably than domestic suppliers of 'like' biofuels or suppliers from other WTO 
Members in a comparable situation;  
viii. Article 5.1.2 of the TBT Agreement, because the EU, by preparing, adopting or 
applying the measure at issue, namely the low ILUC -risk certification, which is a 
conformity assessment procedure within the meaning of Annex 1.3 of the TBT 
Agreement, creates unnecessary obstacles to international trade;  
ix. Article 5.2 of the TBT Agreement, because the EU failed to make a vailable the 
detailed implementing rules for the low ILUC -risk certification;  
x. Article 5.6 of the TBT Agreement, because the EU, with regard to the measure at 
issue, namely the low ILUC -risk certification, neither notified nor entered into 
meaningful consul tations, or allowed for comments on this conformity assessment 
procedure;  
xi. Article 5.8 of the TBT Agreement, because the EU neither promptly published nor 
otherwise made available the measure at issue, namely the low ILUC -risk 
certification, which is a conf ormity assessment procedure within the meaning of 
Annex 1.3 of the TBT Agreement; and  WT/DS600/6  
 
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  xii. Articles 12.1 and 12.3 of the TBT Agreement, because the EU, in the preparation and 
application of the measures at issue, notably the 7% limit, the high ILUC -risk cap, 
the high ILUC -risk phase out, and the low ILUC -risk certification, failed to take into 
account the circumstances specific to developing countries, in particular Malaysia, 
where palm oil and oil palm crop -based biofuel are produced.  
GATT 1994  
xiii. Article I:1 of t he GATT 1994, because the measures at issue, notably the high ILUC -
risk cap, the high ILUC -risk phase out, and the low ILUC -risk certification, 
discriminate among 'like' feedstocks and derived biofuels originating in third 
countries;  
xiv. Article III:4 of the GATT 1994, because the measures at issue, notably the 7% limit, 
the high ILUC -risk cap, the high ILUC -risk phase out, and the low ILUC -risk 
certification, accord less favourable treatment to imported palm oil and oil palm crop -
based biofuel than they do to  'like' domestic feedstocks and derived biofuels;  
xv. Article X:3(a) of the GATT 1994, because the measures at issue, notably the high 
ILUC-risk cap, the high ILUC -risk phase out, and the low ILUC -risk certification, are 
administered in a manner that is not un iform, impartial and/or reasonable; and  
xvi. Article XI:1 of the GATT 1994, because the measures at issue, notably the high ILUC -
risk cap, the high ILUC -risk phase out, and the low ILUC -risk certification restrict the 
importation of palm oil and oil palm crop -based biofuel.  
V. LEGAL BASIS FOR THE COMPLAINT IN RESPECT OF THE EU MEMBER STATES ' 
MEASURES  
A. France  
33. The measures at issue, as embodied and developed in the French fuel tax regulation and 
specified above in paragraphs 25 to 28, and as applied by the relevant authorities, are 
inconsistent with the obligations of France under the GATT 1994 and the SCM Agree ment, 
and in particular with:  
i. Article I:1 of the GATT 1994, because the measure at issue, namely the exclusion 
from the French fuel tax reduction, discriminates among 'like' biofuels by granting 
an advantage, in the form of a tax reduction to petrol and d iesel containing biofuels 
of some countries, that is not granted to all WTO Members, and in particular not to 
Malaysia;  
ii. Article III:2, first sentence, of the GATT 1994, because the measure at issue, namely 
the exclusion from the French fuel tax reduction, results, in effect, in the application 
of a tax on imported oil palm crop -based biofuel in excess to the tax that applies to 
'like' domestic biofuels; or, in the alternative, Article III:2, second sentence, of the 
GATT 1994, because the exclusion from the French fuel tax reduction results, in 
effect, in dissimilar taxation of imported oil palm crop -based biofuel vis -à-vis directly 
competitive or substitutable domestic biofuels, applied so as to afford protection to 
domestic production; and  
iii. Articles 3 and 5 of the SCM Agreement, because the measures at issue, under which 
the French Government reduces the tax on petrol and diesel containing crop -based 
biofuel other than oil palm crop -based biofuels and excludes petrol and diesel 
containing oil palm crop -based biofuels from this tax reduction, amount to a subsidy 
within the meaning of Article 1 of the SCM Agreement, which is: (1) a prohibited 
import substitution subsidy within the meaning of Article 3.1(b); and/or (2) an 
actionable subsidy causing an adverse eff ect on the interests of Malaysia within the 
meaning of Article 5(c) of the SCM Agreement.  
 WT/DS600/6  
 
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  B. Lithuania  
34. As noted above, Malaysia contends that the measures set out particularly, but not 
exclusively, in Article 26 of the RED II and the Delegated Regulation  are inconsistent with 
the EU 's obligations under the TBT Agreement and the GATT 1994. Hence, any 
implementation by Lithuania of these measures in its domestic law would also be 
inconsistent with the same obligations under the TBT Agreement and the GATT 19 94. 
VI. CONCLUSIONS  
35. Malaysia considers that the measures at issue, as identified above, nullify or impair the 
benefits accruing to it directly or indirectly under the cited WTO covered agreements.  
36. Malaysia requests that a panel be established to examine t he measures at issue, as identified 
above, on the basis of the standard terms of reference as set out in Article 7.1 of the DSU.  
37. Malaysia respectfully asks that this request be placed on the agenda for the next meeting 
of the Dispute Settlement Body.  
 
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